This article takes into account 10 key differences between Traditional selling and Online selling. Is retail dead, yet? Is online the only way to go?
We are in an era where starting something has become extremely easy thanks to the internet. Therefore, we are seeing the mushrooming of startups everywhere around the world in various sectors. A homemaker who is into handicrafts can start her own e-store thanks to the internet. Starting something is easy, implementing it successfully is the hard part. All this does make sense, but why have people forgotten the traditional ways of selling?
Let us assume a scenario where one was to sell quirky stuff anything varying from Bobble heads to laptop accessories to phone covers/cases to wallets to bags to small wall décor etc... What are the differences between selling traditionally vs Selling on the internet? What are the pros and cons?
If one were to start a store, the initial investment would be the advance for the store and the rent for the place. For such a store, one wouldn’t need such a huge place to start with. Although, one would have to start it in the right place for it to sell well. The target audience in this scenario is the younger generation, primarily a college crowd or a young working generation crowd. So for a person to rent a small place (to sell like the stuff mentioned above) in a mall like forum or rent a shop near a college would cost anywhere between 15,000/- to 35,000/-. For our convenience, let us assume the cost is 25,000/-. Basic racks and simple showcases need to be made which would cost anywhere between 50,000/- to 1,00,000/-. Let us assume the cost of this is around 75,000/-. Along with an advance of 1,50,000/-
Whereas on the other hand, if someone were to start something on the internet, his initial investment would be primarily setting up the website. In today’s world no small player sets up an E-commerce website from scratch. There are readily available templates which anyone can use or one can simply use websites like Wix to create something for themselves. Although, as simple as it sounds, one would still outsource the work to a developer. Let’s assume this costs around 30,000/- (Including domain name and server space).
Branding and design is a very important part of any venture and would cost the same irrespective of the medium one decides to sell through. Although the packaging for selling online would entail more protection to minimize the chances of the product breaking
Just by having a store at the right place, the marketing that one needs to do is at a minimal. One can resort to basic guerrilla marketing strategies (like handing over pamphlets) to attract a crowd. More over there would be daily walk ins to your store if located at the right place.
Whereas on the other hand, there are hundreds of website that have started selling online therefore you will have to resort to various mediums to scream “CHECK MY WEBSITE OUT. I SELL COOL STUFF”. The first step in selling online would certainly be so set up a Facebook page and ask your friends to like and share it. You will have to make your website SEO compatible/friendly. You will have to start digital marketing which may include (not limited to) Facebook ads, Google AdWords, etc.. You will most definitely have to outsource this. If outsourced to the right people, it would certainly cost you 25,000/- a month. This is not a one-time fee, but is a continuous process that does not guarantee you results but is something that every website must undergo.
The logistics involved in having a store is negligible again. You just need to get your products to the store. This could always be done by putting all your stuff in the car, or a friend’s car or even an auto. This can be done weekly or fortnightly or even everyday depending on how often you go to the store. Whereas on the other hand, the logistics involved online would vary anywhere between 120-150INR per delivery if it’s being outsourced. So let’s assume you’re doing fairly decently and do approximately 75 orders a month, that would roughly cost (assuming the pick-up and drop is at 120INR) 9,000/-
What happens if your customer wants to return the product? Your logistics cost could double.What happens if your product is damaged while your customer receives the product? The logistics cost double. What happens if you send the wrong product? Your logistics cost double.
Assuming you are just starting out; you are going to be doing everything or atleast that’s what you are going to try. So the cost of you working at a store v you working from home (selling online) is going to remain the same.
It is always easy to convince somebody when you can talk to them in person. You can exactly understand their needs and suggest them as per what their looking for. Persuasion is always easy when you meet them in person. Whereas you can’t persuade a person through when you’re selling online. Your website is the only mode of persuasion. Your website, photographs of products, portrayal of image needs to be top notch for a customer to be convinced and buy a product.
When you place your products in a store, there can only be so many stores in a locality or a mall thereby making customers to compare your products with similar ones in other stores and make a decision. Whereas, the internet is an ocean where anyone can find anything by googling, therefore your product needs to be top of the line and your website must be easy to access and must be easily identifiable to someone searching for a product. The latter part will not happen immediately and is a slow process. The website must also look trustworthy with good reviews online.
When you sell traditionally, the scope of expansion will involve you to shed another lump sum amount (advance and basic shelves) whereas when you’re selling online, you just need to invest more on online advertisements and digital marketing that will drive more traffic to your website thereby increasing the brand awareness thereby increasing the chances of conversion.
There will always be a lot of walk-ins when you open a store in the right place. This could vary from place to place depending on the crowd. Whereas when you start a website, the initial people visiting your website is only going to be your friends, well-wishers and family and a few of your Facebook friends. If you think all your facebook friends give a damn about your venture, I’m sorry to say that ‘You’re mistaken’. So a few of your family and friends might share it and a few of their friends might open your website. But that loop will come to an end. You will have to start generating new traffic to your website, and that can only be achieved through digital marketing and good ad campaigns.
The work involved in opening a store involves more man hours than online selling. You will have to open and close the store at uniform hours on a daily basis. You cannot take Sundays off as malls are most crowded on Sundays (if you open up in a mall). You will have to definitely toil it out.
Whereas, here you have to get different parts of the puzzle together for your website to work. You will have to get your digital marketing right, you will have to get your PR right, you will have to get your packaging right, your logistics right etc.. All this would contribute to your customer’s experience and therefore determine whether he/she would be a returning customer or not.
Therefore, there is no perfect strategy that can be implemented. Both Tradition selling and Online selling has its pros and cons. One will have to look at the means available to him/her and decide what’s best for her product. Although comparing both online vs traditional means of selling, one can come to the conclusion that a lot of people are refraining from traditional selling because of initial investment and lack of availability of space. Many people are opting to sell online because there is no initial investment required and it is easier to take the plunge than selling through traditional means and if it fails, the loss wouldn’t be much.
Traditional means of selling certainly has not died and definitely has a future. Just that people are not willing to take the plunge fully thereby sticking to online sales. The best strategy would be a combination of both online and offline once you have a good product to sell.
If you were someone who manufactured and produced your own products, I think first testing the waters is important. So first, show a few products of yours to family and friends and get their review, find out if they would be willing to pay x amount for it. When you make more of your products, show them and see if they are willing to buy them from you. Upload some of your stuff on your personal Facebook page and see if people are interested in buying them. If you feel, there are people who are genuinely interested in buying them (and not buying them because you’re their friend) then you are on the right path. Go to various exhibitions in your city and close by and set up a stall and sell your products. You will know in a few months how you are doing. The next step would be to ‘create a brand’, find the right place, and open up a shop. Get quirky on social media and make your shop well known. Make your social media support your offline sales. As time goes by, you can work on your website and go online. Offline sales will support your online sales eventually.
Taking an example of a store like Chumbak (they sell fun souvenirs depicting India), they started out as an offline retailer and then have now started selling online and 80-85% of their sales comes through the offline medium.
P.S – Please Don’t make an App for your website/store. It makes absolutely no sense!
April 25, 2017
April 25, 2017
Stories by Aashish Krishna Kumar